Medicare starts Web site to compare drug prices

Healthcare Purchasing News, June, 2004

Medicare is opening a Web site designed to help enrollees compare prices of prescription drugs. If it works as advertised, Medicare enrollees will be able to visit the site to find prices of their particular medications at nearby stores that will accept Medicare-certified discount cards. They could then use the information to decide which card would help them most when the discount program starts on June 1.

Controversy surrounds Medicare's choice of hiring little-known Destination Rx to design and run the system without competitive bidding. And because several free commercial price-comparison services are already available online, others wonder if the Medicare site is necessary. Companies that already operate drug-comparison Web sites, including Drugstore.com and PillBot.com, have complained that Medicare administrators did not seek competitive bids before awarding the $3 million, 18 month contract. But executives at DestinationtRx, which operates an online discount pharmacy service, insist they qualify because they already have the computer systems that Medicare needs. The company said its involvement in the Medicare Web site posed no conflicts because it would not offer a Medicare-certified discount card of its own. Medicare officials acknowledge that they did not request other bids before picking DestinationRx, but they defend that decision, citing the urgency of the process. The government contract was awarded to DestinationRx last December during a management gap at the Medicare agency, after the departure of the former administrator, Thomas A. Scully, and before the arrival of Dr. Mark B. McClellan, who had been commissioner of the Food and Drug Administration.